Raising Financially Aware Kids

It’s  important to help your children establish good money habits at an early age; and who better to teach your children about good money habits than you?

As their parent you can start by teaching them what money is and the financial values YOU uphold. Talk to them about money as casually as you would about brushing teeth or washing hands. The goal for now is to familiarize your children with the concept of money and build a basic foundation for some good money habits.

Start with the basics: What is the difference between needs and wants?

  • The grocery store is an excellent opportunity to do this. As you shop distinguish for them which buys are necessary and which are only “wants”. Answer only to reasonable requests from your children, and explain when they asks for something unnecessary.
  • Next you can start encouraging your children on saving rather than spending. Explain to them that because money is limited, you have to prioritize needs before wants. They need to save in order to buy something they want.

As they get older the “lessons” can get into more complex concepts like long-term savings, basic personal banking, and credit cards. Have them consider the following questions to help establish financial plans and goals:

  • How to earn money?
  • What you need to do with your money?
  • What you want to do with you money?
  • How to stay in control of your finances?
  • How to save for future wants/needs?

It’s important for your children to grasp that  money is limited and that if you don’t have enough you can’t get something.  A good way to help them learn this is by allowing your children to purchase a birthday/holiday present for a parent or sibling. Give them a specific dollar amount that they can spend and let them experience what it means to have a budget. This, too, will help to teach them the value of a dollar.

Another good practice method for the real world is givign you children an allowaance.

  • Start your children with something as simple as a piggy bank and give them a small saving “assignment” to achieve – like saving enough to buy a new toy.
  • As the grow the “toy” becomes more expensive.
  • The allowance should be tied to specific actions like: completing weekly chores, making good grades, good behavior, etc. This will help your children to understand that money does not come freely but must be earned.
  • The amount you give your children should depend on their age, your income,  and what expenses your child could be paying.


Have a conversation with your kids. It shouldn’t be a lecture but rather a dialogue, about the value of money and what it takes to afford the things we need and want, and how to saving for the future.


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